Cole v. Wutzke
Minnesota Supreme Court
8/31/16

Cole v. Wutzke, published the same day as Gams v. Houghton (summarized here) relies upon and expands the discussion in Gams, but additionally specifically addresses whether an attorney’s mistake in failing to file within one year can constitute “excusable neglect”.  Cole, 2016 WL 4536505, at *1.  The Minnesota Supreme Court found that an attorney’s ignorance of the application of Rule 5.04 does not doom a Rule 60.02(a) analysis and reiterated that whether specific conduct constitutes “excusable neglect” is a fact-specific enquiry requiring complete analysis of the four Finden factors.

Like Gams, Cole was pending on July 1, 2013, and, therefore, was required to be filed on or before July 1, 2014 to avoid dismissal.  The parties actively litigated the case between July, 2013 through March, 2014.  Id.  On July 22, 2014, defense counsel notified plaintiff’s counsel that the case was dismissed for failure to timely file.  Plaintiff’s counsel was aware of the new Rule, but had not realized it applied to cases pending when the Rule went into effect.  Plaintiff’s counsel then filed the case; defense counsel moved for dismissal per Rule 5.04 and plaintiff’s counsel moved to vacate per Rule 60.02.

The plaintiff argued that his attorney’s neglect was excusable because the on-line version of amended Rule 5.04 did not explain that it applied to pending actions.  Cole, 2016 WL 4536505, at 2. In addition, the plaintiff argued that he should not suffer a complete dismissal of his claims as a result of his counsel’s unilateral mistake.  Id. at 2.  The district court dismissed the case, finding that counsel’s ignorance of the law could not be “‘excusable neglect’” because such an exception to the mandatory dismissal of Rule 5.04 would “‘swallow the rule’”.  Id.

The Minnesota Court of Appeals reversed and remanded finding that the district court abused its discretion because Minnesota courts “have long relieved unwitting clients” of “the consequences of their attorney’s unilateral errors.”  Id. (citation omitted). The Minnesota Supreme Court granted review and addressed whether Rule 5.04 should be considered as a statute of limitation barring any reopening of the case and whether an attorney’s unilateral mistake could be considered “excusable neglect” pursuant to Rule 60.02(a).

The Court found that Rule 5.04 is a non-jurisdictional procedure rule intended to govern the orderly transaction of business.  Id. at 2.  As a result, the Court reiterated its holdings in Gams, including the applicability of Rule 60.02 and that a district court must address and make findings on all four of the Finder factors.  Id. The Court specifically acknowledged that mistakes of law may afford grounds for relief on the basis of excusable neglect.  In addition, the Court reiterated that even if an attorney’s neglect is inexcusable, if such neglect is purely that of counsel a party should not be punished.  Cole, 2016 WL 4536505, at 3.

The Court did not entirely preclude dismissals for failure to file within one year and it specifically cautioned that not all mistakes of law are subject to relief; it is generally within the district court’s sound discretion whether the excuse offered is true and reasonable under the circumstances. Therefore, any such decision requires a fact-specific enquiry.  The Court reversed and remanded for a complete application of the Finden factors in light of the particular facts of the case.  This case ensures that an attorney’s unilateral mistake in filing will not be a substantive win for a defendant, although it appears that was the original goal of the new Rule.  However, it offers a slight ray of hope that Rule 5.04 will not be completely meaningless to defense attorneys in the future and failure to file within one-year may be at least a small factor considered in an analysis of the Finden factors in the future.